Annual sales of approximately $18.3 million for the period ended December 31, 2013, compared to approximately $18.8 million reported for the prior year

Annual net income increased 13% to approximately $1.4 million or $0.13 per share (basic and diluted), compared to net income of approximately $1.2 million or $0.12 per share (basic and diluted) for the previous year

Fourth quarter net sales were approximately $4.3 million compared to approximately $3.9 million in the prior year, an increase of 11%

Fourth quarter net income was $197,295 or $0.02 per share (basic and diluted), compared to net income of $135,503 or $0.01 per share (basic and diluted) in the same prior year period

Ended fourth quarter with cash on hand of over $3.4 million and no bank debt

Paid fifth consecutive quarterly cash dividend of $0.01 per share of common stock

Fourth Quarter Business Highlights

Provided ammonia gas sensor detection systems for measurement of nitric oxide gases for pollution control systems at a major power plant expansion.

Completed development and began shipment of FieldServer's ProtoCessor-based products, which connect to a wireless mesh network lighting control system and enable integration into a building automation system with multiple protocols, to a major lighting controls company.

2013 Financial Results for Fourth Quarter and the Year Net sales for the quarter ended December 31, 2013 were $4,267,857, an increase of 11% compared to $3,851,409 reported for the same period of 2012. For the year ended December 31, 2013, net sales were $18,345,179 compared to $18,759,030 for the same period of 2012.

Sierra Monitor posted a 46% increase in GAAP net income of $197,295, or $0.02 per share (basic and diluted), for the quarter ended December 31, 2013, compared to GAAP net income of $135,503, or $0.01 per share (basic and diluted), for the same period of 2012. Sierra Monitor posted a 13% increase in GAAP net income of $1,352,589, or $0.13 per share (basic and diluted), for the year ended December 31, 2013, compared to GAAP net income of $1,195,829, or $0.12 per share (basic and diluted), for the same period of 2012.

Sierra Monitor posted non-GAAP net income of $276,303 or $0.03 per share (basic and diluted), for the quarter ended December 31, 2013 compared to non-GAAP net income of $265,860 or $0.03 per share (basic and diluted), for the same period of 2012. Sierra Monitor posted non-GAAP net income of $1,711,582 or $0.17 per share (basic and diluted), for the year ended December 31, 2013, compared to non-GAAP net income of $1,667,968, or $0.17 per share basic and $0.16 per share diluted for the same period of 2012.

See Table C of this release for a reconciliation of GAAP to non-GAAP operating results.

Cash PositionSierra Monitor had $3,421,679 in cash at December 2013 with no bank borrowings. Net trade receivables at December 31, 2013 were $1,943,643. At December 31, 2013, the Company's days sales outstanding were 36 days.

"2013 was a year of progress for Sierra Monitor," said Gordon R. Arnold, president and chief executive officer. "We reported strong sales with record earnings and ended the year with approximately $3.4 million of cash on hand. We continued to invest in next generation products, releasing for shipment of two FieldServer-based products, three gas detection modules and numerous protocol drivers and enhancements. We also began a major initiative to expand and strengthen our sales team. The fourth quarter addition of a second sales manager in Dubai, followed by announcement of the appointment of Anders Axelsson as Vice President, Sales and Marketing, indicate our commitment to expanding sales investment for next year and beyond. Mr. Axelsson is a seasoned global executive leader and general manager with extensive experience in both sensors and controls and in networking products. With our strong product line and expanded sales team, I look forward to further successes in 2014," Mr. Arnold stated.

The Company's vision is to capitalize on the expanding worldwide demand for knowledge-based products and services that improve operational performance, productivity, efficiency and safety in building automation, industrial and military applications, while reducing our customers' resource and energy consumption.

Table A

SIERRA MONITOR CORPORATION

Statements of Operations

(Unaudited)

For the three months ended December 31,

For the twelve months ended December 31,

2013

2012

2013

2012

Net sales

$

4,267,857

$

3,851,409

$

18,345,179

$

18,759,030

Cost of goods sold

1,873,171

1,615,132

7,629,338

8,318,419

Gross profit

2,394,686

2,236,277

10,715,841

10,440,611

Operating expenses

Research and development

529,514

526,430

2,156,322

2,167,548

Selling and marketing

967,421

980,359

4,094,819

4,081,745

General and administrative

595,506

541,587

2,246,301

2,236,415

2,092,441

2,048,376

8,497,442

8,485,708

Income from operations

302,245

187,901

2,218,399

1,954,903

Interest income

326

61

3,224

269

Income before income taxes

302,571

187,962

2,221,623

1,955,172

Income tax provision

105,276

52,459

869,034

759,343

Net income

$

197,295

$

135,503

$

1,352,589

$

1,195,829

Net income available to common shareholders per common share

Basic

$

0.02

$

0.01

$

0.13

$

0.12

Diluted

$

0.02

$

0.01

$

0.13

$

0.12

Weighted average number of common shares used in per share computations:

Basic

10,104,311

10,004,311

10,095,978

9,926,961

Diluted

10,241,809

10,168,529

10,152,270

10,139,431

Table B

SIERRA MONITOR CORPORATION

Balance Sheet

Assets

December 31,

December 31,

2013

2012

Unaudited

Current assets:

Cash and cash equivalents

$

3,421,679

$

2,306,258

Trade receivables, less allowance for doubtful accounts of approximately $79,000 and $83,000 respectively

Sierra Monitor continues to provide all information required in accordance with GAAP and does not suggest or believe non-GAAP financial measures should be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Sierra Monitor believes that these non-GAAP financial measures provide meaningful supplemental information regarding its operating results primarily because they exclude amounts the Company does not consider part of ongoing operating results when assessing the overall Company performance.

We believe that our non-GAAP financial measures facilitate the comparison of results for current periods with results for past periods. We exclude the following items from non-GAAP financial measures:

Depreciation and Amortization of Tangible and Intangible Assets In accordance with GAAP, depreciation and amortization of tangible and intangible assets includes depreciation of purchased capital assets and amortization of intangible assets including third party approval fees. We exclude these amounts from our internal measures for budget and planning purposes.

Provision for Bad Debt ExpenseWe maintain an allowance for doubtful accounts, which is analyzed on a periodic basis to ensure that it is adequate to the best of management's knowledge. We exclude these amounts from our internal measures for budget and planning purposes.

Provision for Inventory LossesWe evaluate our inventories for excess or obsolescence on a quarterly basis. Inventories identified as slow moving or obsolete are determined based on historical experience and current product demand. The quarterly analysis is used to adjust the provision for inventory losses. We exclude the provision for inventory losses from our internal measures for budget and planning purposes.

Deferred Income TaxesThe effect of changes in deferred tax balances is non-cash and is not comparable across periods or with other companies. We exclude these amounts from our internal measures for budget and planning purposes. There are no deferred income taxes reported in the current reporting periods.

Stock-based Compensation ExpenseOur non-GAAP financial measures exclude stock-based compensation expenses, which consist of expenses for stock options. While stock-based compensation is an expense affecting our results of operations, management excludes stock-based compensation from our budget and planning process. For these reasons we exclude stock-based compensation expenses from our non-GAAP financial measures. We compute weighted average dilutive stocks using the methods required by GAAP for both GAAP and non-GAAP diluted net income per share.

Sierra Monitor refers to these non-GAAP financial measures in evaluating and measuring the performance of our ongoing operations and for planning and forecasting in future periods. These non-GAAP financial measures also facilitate our internal comparisons to historical operating results. We are reporting non-GAAP financial measures because we believe that the inclusion of comparative numbers provides consistency in our financial reporting. We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year.

Sierra Monitor believes that non-GAAP measures have significant limitations in that they do not reflect all of the amounts associated with Sierra Monitor's financial results as determined in accordance with GAAP and that these measures should only be used to evaluate Sierra Monitor's financial results in conjunction with the corresponding GAAP measures, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Because of these limitations, Sierra Monitor qualifies the use of non-GAAP financial information in a statement when non-GAAP information is presented. In addition, the exclusion of the charges and expenses indicated above from the non-GAAP financial measures presented does not indicate an expectation by Sierra Monitor management that similar charges and expenses will not be incurred in subsequent periods.